ICP defies crypto downturn with Caffeine-fueled rally and whale accumulation 

Internet Computer’s ICP token rallied for the fourth day, outperforming the broader crypto market amid hype over the announcement of its new AI-driven platform, Caffeine.

According to data from crypto.news, Internet Computer (ICP) rose 8% to an intraday high of $5.66, pushing its market capitalization above $3 billion. The token is now trading 32% above its year-to-date low.

Today’s gains, supported by a notable increase in daily trading volume, came as the broader cryptocurrency market slumped, with total market capitalization falling 2.2% to $3.4 trillion over the past 24 hours.

ICP’s recent rally was driven by excitement around Caffeine, an AI-powered development platform from the Dfinity Foundation, which recently opened for alpha access. The Dfinity Foundation supports the development of the Internet Computer Protocol. 

In the live demonstration at the World Computer Summit in Zurich on June 5, founder Dominic Williams revealed that Caffeine will enable users to create blockchain applications in real time on ICP through natural language conversations, removing the need for traditional programming skills.

The platform leverages ICP’s secure smart canister architecture and aims to democratize blockchain development, making it accessible to a global user base via smartphones. As of press time, the alpha version is currently open for waitlist registration, with a public beta launch expected within the next month.

This surge in attention around Caffeine appears to have sparked renewed investor interest in ICP, particularly among larger holders. 

Data from Santiment shows a rise in whale accumulation of ICP, specifically among wallets holding between 1,000 to 1 million tokens. Such whale accumulation typically triggers FOMO among retail investors, who follow suit, often leading to further appreciation in the asset’s price due to increased demand.

ICP price analysis

On the 1-day USDT chart, ICP has broken out of a multi-month descending trendline, signaling a potential shift in momentum.

It’s also moved above the upper boundary of a descending channel pattern, adding to signs of a bullish reversal. ICP is trading above its 50-day simple moving average, which further supports the bullish case.

On top of that, both the MACD and RSI are pointing up, which shows buyers are stepping in and momentum is picking up.

Based on this setup, the next likely target is around $6.88, which lines up with the 23.6% Fibonacci retracement level. If it breaks above that, bulls may aim for the next major resistance at $8.53, the 38.2% retracement level, about 51% higher than current prices.

However, if ICP drops below the key psychological support at $5, it could slide further down to the next major support around $4.20.